The ammunition point is true. The AMOS mortar can be used as an assault gun, as can 2B9 Vasilek and other medium-velocity gun-mortars.
The major problem is that if NLOS-M is pretending to be a tank it can't be a very good mortar at the same time.
You're not only diminishing the mass of the force (people will want to cut more units out of an organization if they think a unit can do multiple jobs at once) but you're diminishing the commander's flexibility by forcing him to use a single weapon as he would multiple ones. Mortars are probably the most valuable weapon in urban combat FWIW, so splitting them up into assault gun teams and mortar teams is risk losing concentration of force, one of the key principles of war. The loss of one of these assault guns to an ATGW would felt more than the loss of a single tank or a single mortar if the weapons were segregated, it gives a good incentive to cut force sizes by looking at the multiple capabilities of these vehicles and slashing the mortar and tank issue plans in half because you have a "do-all" vehicle, and you're still going to need an actual tank to attack enemy armour because a low velocity mortar isn't going to cut it in providing high velocity direct fire.
It is literally the same issues brought up with MMEV. However, BMP-3 would be a better comparison since it can pretend to be both a tank and a mortar. MMEV was more like an air defense vehicle, tank destroyer, and smoke generator all in one, but it suffered from the same problems of politicized force reduction and problems of concentration that splitting MMEV between a LAV-NLOS, LAV-AD, LAV-TOW, and LAV-SMK would have solved. The downside is sticker shock I suppose, but multiple dedicated platforms working together are always greater than the sum of their parts. A single "do-all" vehicle is expensive both in terms of capability lost if it's destroyed or disabled and the quantity needed to fulfill the same mission as multiple dedicated vehicles.
The other problem is that you're seeking a technological solution for a tactical problem. This is unnecessary as we've already solved this conundrum with current equipment. The issue of high angle and RPG attack is covered by having the tanks operate in buddy teams with either another tank or an infantry carrier to cover it at a distance. It avoided a Grozny in Fallujah. It'll avoid a Grozny in Talinn or Freetown or wherever The Next War will be fought. The other real alternative is introducing a tank escort vehicle like BMPT but even the Russians are getting away from that since it seems they've merged BMPT and BMP into a single chassis with T-15, and the Germans haven't touched the idea of tank escorts since Begleitpanzer 57 died in the '70s.
It's true that mortars like AMOS/NEMO/Vasilek/NLOS-M can be used as assault guns, but this is rare in real life. In practice it only happens because the person in charge either has literally no other weapons capable of defeating the target (the US Army in Aachen used high velocity self-propelled guns and the Russians in Berlin used super heavy howitzers to break down the thick masonry of European architecture, Gott mentions the former explicitly) or because he has literally nothing else that can do the job.
There's nothing wrong with providing natures of ammunition for self-defense of a mortar battery either, this could theoretically be used in an infantry support role too, but you've missed the point of the tank. The principal job of the tank isn't to fight other tanks or lead counterattacks: it's to provide a mobile gun platform that can deliver accurate direct fires to things that might slow down the infantry, that the mortars and artillery have missed. The tank showed up to deal with machine guns and barbed wire in the Western Front, it'll stick around to deal with machine guns and bus barricades in the urban battles of tomorrow.
If you had an NLOS-M with an up-armor kit that could provide adequate protection for the urban jungle, you'd likely be looking at a vehicle that might weigh somewhere north of 40 tons with all aspect Special Armor and active protection, protecting its 120mm medium velocity mortar and three man crew who live in an armored capsule. For reference, SPz Puma is ~40 tons, but it has a smaller gun, larger volume, and commensurately less protection than any tank. You're not so much talking about replacing the tank in urban combat as you are trying to give tanks mortar guns.
Anyway, this is a bit of a tangent so I apologize. The implicit course of action I'm thinking about is that the only way you're going to see mortars used as you imagine them to be used would be if tanks don't exist. If tanks exist, the mortars will be used as mortars, the tanks will be used as tanks. Training officers to do it another way will just result in them either having loads of preventable deaths, using tanks anyway because it works better, or both. Giving penny pinchers the chance to cut force and cost by rolling capabilities into a single vehicle is just asking for trouble. Trying to make a mortar into a tank will just result in a overloaded mortar carrier or a poorly protected tank, or both, because the tank has a specific niche that hasn't disappeared in the mountains of Korea or urban jungle of Aachen or Berlin.
Reading Grozny as an example of tanks being bad for urban combat is reading Grozny wrong. The correct interpretation is that sending troops with no prior preparation, refresher training, or area specific planning/intelligence, operating under normative assumptions without accurate reporting of unit readiness, is bad for urban combat. Fallujah is the most telling example of how to use heavy troops in urban combat. More or less total victory because the people in charge understood their troops and understood their terrain which was the opposite of 1st Grozny.
